Accouitng treatment of appreciation in shares held as stock
This query is : Resolved
01 August 2010
I am a dealer in stock.(Holding Shares as stock in trade)
I have 100 shares of company A
I have 200 shares of company B
NOw both company A and B gets amalgamated and formed a new company C
I was alloted 200 shares of new company C
I was holding Company A and B shares as closing stock, now what is the accounting treatment of new alloted shares of C and old shares of Company A and B
I have 100 shares of company A
I have 200 shares of company B
NOw both company A and B gets amalgamated and formed a new company C
I was alloted 200 shares of new company C
I was holding Company A and B shares as closing stock, now what is the accounting treatment of new alloted shares of C and old shares of Company A and B
01 August 2010
Only cost of shares in company A and company B would be the cost of shares in company C.
There would be no change in valuation.
There would be no change in valuation.
01 August 2010
Generally the Stock is Valued at Cost or Net Realisable Value which ever is Lower(AS-2). Hence you have to value the stock at cost price only as the market value is more than the cost price
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